A worldwide sell-off pushed U.S. stocks to their worst week since 2011 as spooked investors scattered amid worries of an economic slowdown in China and the potential for higher interest rates at home.

The Dow Jones industrial average capped a four-day losing streak by dropping more than 500 points to close at 16,459.75, sinking 10 percent from its May peak and following even steeper market declines in Asia and Europe.

The rout will further rattle workers whose 401(k) retirement accounts have taken a troubling hit. Investors have lost billions in recent weeks and are flocking to safety-net Treasury bonds as they wait for the bleeding to stop.

Widely held stocks such as Wells Fargo, Google and Facebook have lost tens of billions of dollars in market value in two days. Apple, one of the world’s most-traded stocks, was up 20 percent for the year as recently as July but has lost all of its gains — and ended the week down 9 percent.

The stock crunch signaled a possible turning point for the long-rallying markets, which spent the summer unusually flat — buoyed by encouraging U.S. economic indicators and better-than-expected corporate results.


But analysts said it was too soon to tell whether the tough week was a temporary ripple in otherwise healthy markets or a sign of deeper, more distressing flaws.

“It kind of raises the red flag, but it’s not waving it yet,” said Brad McMillan, chief investment officer at Commonwealth Financial Network, which manages nearly $100 billion in assets. “Back four or five years ago, we would have called this normal volatility. It’s only because it’s been so calm that this looks so unusual.”

Plunging oil prices and increasingly turbulent overseas economies led one gauge of investor fear, the CBOE Volatility Index, to soar this week. But some analysts cautioned investors, who they said had been lulled by months of steady markets, to take the correction with a grain of salt.

“The market doesn’t just go straight up,” said Scott Wren, senior global equity strategist at the Wells Fargo Investment Institute, who has been advising clients to be ready to take advantage of cheap stocks. “You’ve got to sleep at night.”

Worrying new signs that China’s economy was losing steam drove investors to the exits, particularly after the world’s second-largest economy announced its most disappointing manufacturing results since the global financial crisis.

The new plunge followed Beijing’s surprise announcement last week that it would devalue its currency, adding to worries about China’s sagging demand and pushing commodity prices further down.

Looming questions over whether the Federal Reserve will raise its ultra-low interest rates for the first time in nearly a decade drove domestic worries, as well as prices for U.S. crude oil that briefly dipped below $40 a barrel, the cheapest since 2009.

“You’ve got a central bank in the U.S. that was poised to pull back, but probably won’t, and you’ve got a central bank in China that appears to be ineffective,” said Jack Ablin, chief investment officer at BMO Private Bank. “There’s somewhat of a ­crisis of confidence in central banks among financial market risk-takers.”

The Standard & Poor’s 500 stock index sank below 2000 for the first time since January and closed at 1970.89, posting its sharpest one-week drop in four years. And the losses bruised companies in virtually every industry, with S&P 500 companies losing more than $1 trillion in market value this week.

The Nasdaq composite index sagged more than 3 percent, to 4706. But the Dow’s losses were even more prominent. Friday marked only the fourth time in five years that the market closing bell had rung with the blue-chip index more than 400 points in the red. The index has fallen 10 percent from its peak, what Wall Street calls a “correction.”

Analysts pointed to the stark difference between the relative health of the U.S. job market and broader economy vs. the spread of market anxiety overseas.

An unexpected fall in China’s fortunes drove markets in Shanghai, Tokyo and across Europe to steep drops. Signs of international uncertainty, like the resignation Thursday of Greece’s prime minister, Alexis Tsipras, added to fears abroad.

“There’s an old phrase that says that the market takes the stairs up and the elevator down. That’s what you’re seeing,” said Jim Dunigan, chief investment officer at PNC Wealth Management. “It gives you a reason to pause. . . . You check the dashboard. It looks like the U.S. economy continues to be in pretty good shape.”

The yield on the 10-year U.S. Treasury bond, a low-risk comfort in times of stress, dropped to its lowest level since April, about 2.04 percent, a sign that investors were eager to avoid a potential market meltdown.

“People are looking for an excuse to worry,” said Geoffrey Sipes, a portfolio manager at U.S. Trust, a wealth management firm owned by Bank of America. “That’s healthy. It means people are paying attention.”